Sunday, August 26, 2012

When I first heard of this story, the first thing that came to my mind was the images I’ve seen long ago, of women who were brutally raped during the conflict in the Balkans in the 1990’s.Many of them did get pregnant, despite the brutality they endured, which according to Mr. Akin should have prevented them from conceiving.Some of the young girls, which were shown in the media, had missing teeth and scars, which speaks volumes about what they endured.Thinking back to those images, my initial reaction was same as everyone else’s “how can a person say such a thing?”After reflecting on this question for a while, it occurred to me; we are wrong to be surprised and shocked.

What Todd Akin said was wrong both from a scientific and ethical point of view. The media, especially on the right, hurried to claim that it is just the result of Mr. Akin being somewhat deranged, and out of touch with reality, perhaps due to a troubled childhood.In other words, this does not reflect the culture of the party, as the article bellow, courtesy of Fox tries to argue.

On the left, they hurried to capitalize on the political gain that is to be had as a result of the terrible comments that Mr. Akin made.They rushed to point out every hint of this being a widely held idea within the right leaning circles.But is he the only public figure who has been going around claiming things that can easily be disproved as untrue lately?Is the left not also engaged in the same type of culture of distortions in the interest of gaining political advantages at the expense of massive misinformation that our society is now subjected to, to our detriment?

The cultural environment that created Mr. Akin

It is important to recognize that the only reason we are talking about the outrageous comments made by Mr. Akin is because it is a highly emotional subject that he touched on.Truth is that we have become highly tolerant of false claims and outright lies, so in the absence of the emotional aspect of his claims, we probably would not bother to focus on this.In fact, we demand of our elites that they tell us what we want to hear, instead of providing arguments based on accurate information, because we are no longer eager to learn about the world as it is, rather we are thirsting for the image of the world we live in, to be presented to us in a way that validates our ideological views, in order to have our beliefs reinforced.We no longer care if the facts are true or not.We no longer want to have our claims and arguments challenged, thus we tend to shy away from being faced with a situation where contrary facts are pushed before our face.If we do encounter counter facts to what our side claims, we dismiss them as “political talking points”, in order to avoid having to take these counter arguments in consideration, even though what may be presented is not opinion but hard, undeniable fact.

In effect, our set of values we hold, usually wrapped in an ideological package, has become shielded from being challenged.This is how outrageous ideas develop within ideological circles.I’m sure that Mr. Akin did not just recently wake up with this belief.In fact, it seems that it is based on a claim made decades ago, by a doctor named John Willke, with strong anti abortion views, looking to validate through false scientific arguments a puritan stance on abortion rights.In other words, Mr. Akin has probably been carrying this belief with him for a while, and I’m sure he expressed them in certain circles in the past.Like I said however, we no longer seek to have our beliefs challenged, so the ideological circles are becoming more and more purified, thus no matter how outrageous some of the ideas circling around, and how flawed they may be, there is no more natural selection coming from the pressure of being challenged.All someone would have had to do, would have been to point out to Mr. Akin at some point in the past that his statements don’t seem to measure up against evidence to the contrary that is as clear as day, and easy to understand.There is no shortage of conflict areas on this planet, and women often end up being the victims of these conflicts.There is certainly no shortage of a double tragedy for some of these women, as many do end up getting pregnant in the process.Evidently, there was no one around Mr. Akin to point that out to him, before he went to the mainstream media and made a fool of himself.

What we are doing is as absurd as proposing that journal articles should no longer be peer reviewed and verified, yet this is what we do with our society.We have become so polarized that the facts and the truth do not matter anymore.We simply thirst for our ideological camp to become victorious at any cost, including at the price of loosing our collective sense of reality.As proof of it, we will probably witness the incredible in a few months.Todd Akin, who has been urged by his republican colleagues to drop out, might not win a senate seat, but there will certainly be many people who will still vote for him.He might even surprise us all and actually pull off a victory.If that is the case, it will be a testament to our cultural dysfunction, for which we will end up paying an increasingly steep price as time passes, with no effort made to fix this.

Consequences:

For Todd Akin, the consequence is that he has become a pariah.The consequence for us as a society is far more severe, as a result of this culture that created him and his mentality.The cost to us is that we are no longer able as a collective to exchange information and decide on the course of action needed to make our society work.The flow of ideas remains stuck in a closed circuit, within the ideological circles that are becoming cemented.Thus our decision making process becomes paralyzed, which is something that cannot be denied, since the ideologically driven partisan farce in the US capital, which led to the country being downgraded a year ago.We still continue to witness the same dysfunction, which will exact an increasingly heavy price.As a society we can no longer hope to find consensus on what our main problems are, never mind trying to solve them.In short, through this extreme ideological polarization, this society is becoming paralyzed and dysfunctional.

Ideas and proposals meant to address our problems are just as flawed through the infection of ideology, as the ridiculous statement made by Todd Akin. We will never get as worked up by these lies as we did about the rape comments, because most statements will not be as personal.These ideas can be as dangerous or even worse.

Let us take climate change as an example.It may not be as personal an issue as rape, but if the scientists who make the claim that our climate is changing and could have serious consequences are correct, our inaction will lead to a lot of rape as well as other human on human crimes being committed around the world, because hunger can lead to failed societies, and failed societies lead to precisely this kind of stuff.So, the denial practiced on the right is every bit as bad as Todd Akin’s denial of the fact that rape can lead to pregnancy.

Not to leave the left out with their ideological convictions that might be deeply flawed and harmful, we should stick with the example of climate change. This is a topic on which, I have been highly critical towards our left leaning elites, in fact I dedicated a book to the wider subject of sustainability, and their flawed proposals for dealing with it.Not only that, but I offered a solution that can be a viable alternative to their flawed proposals.The western left leaning elite advocates unilateral action on climate change, advocating economic suicide in the process, while in reality, there is no measurable benefit to this self sacrifice.The only ones benefiting would be our economic competitors.The left is stuck holding on to romantic notions of humanity coming together and solving this issue.All we need to do is get the ball rolling by being the first to sacrifice, according to them.As a result, they are in fact proposing solutions that leave us worse off than we would be by listening to the right, and their distortions that justify their denial on this issue.We would not only continue to suffer the effects of climate change under the proposal of the left, since voluntary self sacrifice on the part of the west is not nearly enough to prevent this anymore, but they are also proposing we commit economic suicide as well.We do need to resolve this problem for ourselves and for the planet of course, but as I pointed out, there is no solution to this within the ideologically filtered set of ideas, coming from either side.As far as an idea like the standardized trade tariff I proposed to deal with our sustainability problems, it is not designed to appeal to either ideological camp, so it will remain an orphan, just like all other ideas that do not make it through the ideological purity test.

The examples of disinformation on the part of our elites are endless.I’m sure that in a moment of honesty, all of us can admit to having swallowed one of these lies or distortions, mainly because we liked the fact that it supported our own point of view, even though deep inside, we always knew them to be false.If that were not the case, we would not have the polarization of the media happening as it is right now.The media is nothing but a service provided to our taste.Our taste evidently leans towards a high level of tolerance for willful distortions.

What to do about it?

It is clear that the current social dynamics within which we operate are broken.We cannot function for too long like this.We will leave problems unsolved, and we will incur continuing damage as a result.So in other words, our greatest problem is not the debt, climate change, peak oil, the social safety net, economic growth or any other issue.Our greatest problem is our dysfunctional culture.That is where we need to start if we are to tackle our problems and find appropriate solutions.Unfortunately, this is the toughest problem any society can ever be expected to fix.Historically speaking, most societies only abandon major cultural traits in the aftermath of great disaster.

What I suggest for those who read this article may seem outrageous, repulsive, ridiculous and a host of other things.If you however truly see yourself as a person that wants the good of our society, then you will do this.We can only ensure the survival of our society if we have a constant infusion of new ideas.These ideas need to be put through the filter of reason, not of ideology as is the case now.It is up to each and every one of us to become a component of the filter of reason.

So here it is:Get to know someone from the opposite barricade of the ideological divide.Offer to take them out for a beverage of their choice, in order to be able to discuss things.Try to find someone knowledgeable, because there is no point talking to people who simply repeat slogans, which they themselves do not fully understand.Do not try to convert your conversation partner.Try instead to get them to point out the flaws in your own convictions.Try to reciprocate the service.If for any reason, you are skeptical of the facts and views offered by your conversation partner, look up the facts for yourself, because after all, we do live in the era of information.Just make sure that you distinguish between fact and opinion when researching. Afterwards, thank them for their time, offer to do it again sometimes and go back to your own ideological circle, and confront everyone there with the new facts you learned, whenever the topics of interest to you come up.

In other words, the only solution is to try to break up these solidified ideological camps.Nothing good will ever come out of them, because as Todd Akin has proven to us, these circles are infected.When we can no longer sway people based on facts, the democratic process itself is broken, at which point there is no more justification to defending democracy.When the democratic process fails, there will be only one alternative, and as someone who lived within one of the most brutal of these alternatives in Europe decades ago, I can tell you from experience, that we better do our patriotic duty and defend democracy from the disease of ideology before it becomes too late.

Monday, August 20, 2012

If we were to release a convicted murderer from death row back into society, what are the chances that the person will end up back on death row?I don’t know the precise answer to that and I will not go into the argument, because the precise answer is not important to the conversation I want to bring up.What I do care about, and took the time to look into, is humanity’s collective behavior in a similar situation, and that is what I want to share.

The convicted murderer could take the opportunity to take the second chance, and have a new life.He/She could start a family, get a job, and even strive to do something that would have a lasting positive impact on others.Many would not take such an opportunity, and we should really be more understanding of it, because we humans as a collective seem incapable to even identify the second chance, much less take it.

A few years back, we started to worry that the people which society regarded as nothing more than alarmists might be right about impending disaster as a result of dwindling resources, such as oil.Petroleum prices shot up from just over a decade ago by about 500% in yearly average terms.Other commodities also showed signs of a world that is at its limits in terms of what it can offer.In fact food is still an ongoing problem, which is likely to yield a third global unrest event due to food prices and availability in only half a decade.In the course of the decade, came also the realization that the market can bring secondary sources to the market, so no reason to worry, or so we are told anyway.

We currently consume about 85 billion barrels equivalent of oil, in total hydrocarbon based energy every year.Global demand is growing at a 2% average yearly rate.Currently, proven reserves of coal, oil and gas are about 5,700 billion barrels of oil equivalent according to the EIA 2009 tally.It is absurd of course to pretend that since this is our proven reserves base, this is what we have.Technological advancement, price and other factors can all influence the ultimate recoverability factor of the resources we know to be in place.Furthermore, we are still finding new resources, although as is the case with petroleum, consumption has been outpacing new discoveries by a wide margin for decades already.Coal is also a resource that can offer few new surprises, because we know about the presence of most large deposits on the planet.One thing that we should keep in mind about the forward march of technology and knowledge is that as it progresses, our puzzle of the world’s resources is starting to be more and more complete, thus the chance of positive surprises is dwindling.

All the positive news that we received last decade, comes mainly from resources we already knew to be there, it is just that technology and price, as well as our desire to exploit these resources only made it viable recently to produce them in substantial quantities.One possible exception we can point to is the deep water oil and gas discoveries. Here is where I believe our collective human wisdom is failing us.As the conventional sources of hydrocarbons are showing increasing stagnation in production, we decided to buy time by drilling in deeper oceans, fracturing underground rocks to squeeze more oil and gas out, and we are washing sand in Canada to get oil out of it.

By deciding that we will refine Venezuela’s heavy oil, we gained maybe another three years of hydrocarbon supplies, Canada’s oil sands gave us another two years.Fracking in US provided us with an extra one and a half years, and as the technique will spread to other parts of the world, maybe we will get another ten years worth of consumption.Underground coal gasification projects may also add many more years to our hydrocarbon supply.As we allow ourselves to be swept away with excitement at all these new sources of energy, which will keep the good times rolling, and the developers rolling in cash for a while longer, we forgot that we bought time, not a permanent reprieve.

How much time?Hard to say!!!The most important factors are energy flow rates, energy return on energy invested and how easily we can adapt to using the changing hydrocarbon fuel mix.Petroleum has been our top source of hydrocarbon energy in the modern economy, but it is also now the least abundant, even if we add the unconventional sources to the tally.So the energy mix will have to change drastically.Recently, focus has been on gas for political reasons, having to do with the need to reduce emissions.I’m guessing that in less than two decades however, we will turn our focus on the most abundant hydrocarbon energy source, which is coal, with its very dirty side-effects.

Note:The data can be found on the EIA official website. This data is somewhat outdated, but still gives a pretty accurate picture of the energy situation.Newer estimates by BP put the oil proven reserves at 1.6 trillion barrels.I have to point out however that we also have to account for OPEC’s political rather than proven reserves that make it in the tally, which amounts to about 300 billion barrels that they cannot account for by pointing to new discoveries.So, unless unconventional petroleum sources such as Kerogen from the GreenRiver Basin in US will one day make in the proven reserves column, chances are that petroleum is now indeed the least abundant hydrocarbon still available to us, even though it still plays the largest role in the energy mix.

Flow rates can be misjudged by constructing our tally of resources increasingly from hard to exploit sources.There is no way Canada’s oil sands will ever produce higher volumes than Saudi Arabia does, despite the resource volume being comparable.

Energy return on energy invested is especially important, because as we look at our resources left to be exploited, increasingly they are made up of deeper coal mines, oil sand, tight oil and gas, deep ocean oil and gas, and the tired old oilfields that already yielded most of the easy to get oil, so now we have to work much harder to get the rest out.Energy return on energy invested in the oil industry for instance was about 100/1 globally a century ago.Now, despite all our high tech gadgets, and all our knowledge, we are getting about 20/1.That ratio is quickly headed towards 4/1, as that is what we are getting from fracking and mining oil sands, as well as from the older giant fields.

Political and geostrategic interests may also affect energy flows.Resource nationalism can develop out of the realization that what is in the ground can only become more valuable if left there longer.Countries like Saudi Arabia will one day have to come to face the reality that they are a one trick pony, and they need to make it last as long as possible.

So we may have gained a decade, two, three or four, thanks to the effect of higher prices, and the magic of the market which dictated the advance in technology needed to access marginal resources at a positive rate of energy and financial return.The price we decided we are willing to pay is a higher level of environmental destruction. The price is also the foregoing of utilizing certain assets for other purposes, such as is the case when farmland and the water that farmers need is re-allocated to oil and gas exploitation.

The price humanity pays, by not considering the long term needs is that we will leave our future generations with far fewer resources.It may sound comforting to some to think of a century worth of hydrocarbon resources at current rates of consumption as some more optimistic estimates seem to suggest.Rates of consumption will increase, the century will get shorter, and before we know it, the ones most dear to us (our children) will be left with an even bigger mess than that with which we are faced with now.

The lesson most people chose to take away from the past decade, in regards to the energy constraints scare is that we faced a crisis, and the market together with good old human ingenuity combined to once again save the day.A closer look tells us another side to the story.It is the story of the low hanging fruit.We were no longer able to sustain ourselves on the low hanging branches which offered us nutritious fruit for the taking.We therefore had to build ladders to move higher up.To build the ladders we needed prime materials, so we cut down some of the fruit trees, in order to get to the higher branches of the other trees[i].So, the ladders did not come for free, we had to forego the opportunity to harvest those trees that were cut down.Eventually, even those higher branches will be harvested.In fact, we will harvest them at a higher pace, because we needed more energy to do the extra work of building the ladders and climbing up on them to harvest more fruit.

We always knew approximately how much fruit we had in the orchard, so the ladder innovation did not create more resources, it only made a higher percentage available.Eventually the good healthy fruit will no longer sustain the population, so they will eat the unconventional, half rotten ones from the ground and the ones infested with worms, even though the net benefit to the body is no longer as much.At that point, they should realize that it is game over and change is needed.So why don’t we?

[i] We are assuming here a more simple economy made up of people and fruit trees growing on a finite piece of land that makes up the orchard.For those not familiar with the practice in basic economics of simplifying a model in order to narrow it down to a few factors in order to better understand their relationship to each other, it is how much economic analysis is done.

Monday, August 13, 2012

When the first European settlers arrived in North America, did the natives have a clue what their future generations were in for?Would they have guessed it right around the time of the American Revolution?They were most certainly decimated by the time of the American Civil War, but even then, there were many Native Americans who still lived as they did generations before.Some even had it better, as was the case with the last free tribes on the plains. They were at an advantage compared to their ancestors, because they had horses to help them on the hunt, as well as many manufactured tools.It was probably not until sometime towards the end of the 19’Th century, that it sunk in to the few remaining free natives in the United States and Canada that they were finished.They were outcompeted by a different culture.They probably would have gone extinct eventually, if it wasn’t for an awakening of a bit of conscience on the part of many non-native people, which ended the process of extermination decades ago.In fact, our current policies are leading to a demographic comeback, if not a cultural one, for the Native American nations.

Extinction of a tribe, culture or nation is nothing new.It has been happening throughout the ages, and it will continue to happen in the modern era.The extinction is most often (but not exclusively) the result of unsustainable cultural adaptations (Read Collapse, by Jared Diamond).The big question is who is next?

My best candidates are the European nations and cultures, and collectively they are as clueless as many Native Americans were, mainly because it is a bit of a taboo subject.Many people heard by now about the impending demographic challenge Europeans face.No one however in the mainstream is willing to spell out just how imminent and serious this is.To best illustrate the discrepancy of what official mainstream structures suggest lies in the future of these countries and people, and what the actual prevailing reality is, I will write a series, concentrating on the situation in a few countries, which are to some extent representative of the wider picture.

For my first case study, I chose Romania, the country where I was born.There is a lot that non-Romanians can learn by looking at the situation there, because it is in many ways a harbinger of things to come.

Romania’s Demographic history:

As the era of communism in Eastern Europe was ending, Romania’s population was the second youngest on the continent.A forced increase in the population through drastic measures meant to limit family planning, ranging from outlawing the sale of most forms of contraceptives, to outlawing abortion, led to a population boom starting in the late 1960’s and went on well into the late 1970’s.It was only in the 1980’s that this boom slowed down slightly, due to many factors, including the rise of the butcher abortions, the penetration of contraceptive products on the black market, as well as the worsening economic conditions that made it impossible for people to accept having more kids.In 1989, when the communist dictatorship of Ceausescu collapsed, there were almost 370,000 births and a population of 23.2 million people.

A report just five years ago was predicting that Romania’s population would decline to 19.6 million by 2035[i].Last year’s census showed however that Romania already breached that point as of 2011, since its population is only 19 million now[ii].So, that country’s population declined by 4.2 million people, or 18% in two decades, which contradicts projections that suggest there is no reason for alarm.Birth rates currently hover at around 200,000, so almost half of two decades ago.If we are to consider only the non-Rroma (Gypsy) population, the birth rates have been cut by half, because there is evidence that the Rroma births have actually increased slightly from about 30,000 in 1989, to probably around 40,000 per year currently[iii].So, that means that the non-Rroma births went from 340,000 to about 160,000.

The bulk of the population loss is due to immigration.The difference between births and deaths since 1990, taken cumulatively suggest a stagnated population.The loss resulting from this imbalance was half a million, which means that 3.7 million people (mostly young), left the country over this period.This however changed as of the last few years, and now there is a widening gap between births and deaths.The gap averaged about 30,000 people per year during the last decade, while this current decade, it looks set to widen to about 80-100,000 per year.In addition to that, the trend of out-migration may slow, but is still an important factor, the effect of which is now magnified by natural population decline increasing substantially.

Chances of reversal:

Total births do not have a chance of rebounding, because if we look at the total reproductive female population, we have a net loss of about 50,000 per year, due to more exiting this category than entering.There are currently about 4.5 million women of reproductive age in Romania, so the loss is about 1% per year[iv]. We now have females maturing to reproductive age from the post 1990, low birth era. There is an additional loss due to out-migration, which we cannot be sure of in terms of its magnitude, but we know that it still continues.

If things continue along the current path, non-Rroma births can drop to somewhere around 20-40,000 per year by 2100.That is only 10% of what it was in 1989.It is important to understand that with such a calamitous drop in population, creating a huge disparity between young and elderly, it is hard to imagine a state surviving at all.So in effect, we can be looking at the seemingly incredible prospect of failed states appearing in Europe before 2050.Romania is not the only European country in this situation.The entire region is looking at a more or less similar trajectory.

It is hard to imagine how this trend can be reversed at this point.Low fertility rates are due to the poor economic environment, which is getting ever worse as the demographic balance continues to shift towards more and more dependents (pensioners).The country’s potential labor force, currently at around nine million, is shrinking at a rate of about 100,000 per year, due to the gap between those turning 65, versus those entering the workforce.Out-migration will probably double the yearly rate of loss.Meanwhile, the number of pensioners will either remain steady at the current level, or even increase slightly over the coming decades.Currently there are as many non-farm workers officially employed as there are pensioners.

The only thing that could save the situation would be a burst of growth and development, which cannot materialize in the absence of stemming the continued outflow of young people, and without major reforms that are unlikely to come on the part of government.This economic expansion would have to be strong enough to actually start enticing a portion of the ones who already left to move back, and perhaps convince a proportion of young families that it is alright to expand their families.With every year that passes, the situation is deteriorating.As the situation deteriorates, the country’s political culture, as well as that of the population will deteriorate.Reason will give way to hysteria, and the ability to understand and deal with the problem will diminish.

So is it possible that in about ten generations we will hear people here and there say, how they are 1/8 Romanian, or some other extinct group from the region, just as is the case with the Cherokee nation for instance?I believe this will be the case for most European nations, in the absence of a cultural and economic shift that will break the current trajectory.In ten to twenty generations, there will be no more Romanians, Germans, Russians, Italians, or Hungarians.There will only be people telling stories about how they are 1/8, or 1/16 this or that ethnicity.I believe we would have been talking about maybe thirty generations for many nations, before the 2008 economic crisis.But for reasons I will specify in next month’s article on this issue, that time frame has been shortened considerably.

Implications for the world:

From an environmentalist’s perspective, some may be tempted to cheer this process.High birth rates in other parts of the world are causing an increase of the world’s population equivalent to Europe’s entire population every ten years, so in effect the disappearance of the Europeans is the equivalent to gaining a decade demographically.Many left-leaning people also think that this is a good thing, because the disappearance of the high consuming Europeans will free up resources for others.

Aside from the fact that it is a perverse thing to cheer the demise of all those cultures, there is also reason to take a step back and reconsider the negative consequences for global sustainability.

For one thing, Europe accounts for a very large percentage of the world’s food production.Europeans are net exporters.Social collapse may mean that they may end up becoming net importers of food.Even in the worst case scenario imagined, Europeans will still have an above average GDP per capita for a long time to come, which means that in the event of food disruptions domestically, they will outbid many others around the world.

Europeans do consume more than many others around the world, but Europeans are also the most efficient on a per GDP basis at meeting their needs, on fewer raw materials and with a smaller overall environmental footprint.If this culture breaks down and eventually disappears, so will a large part of the world’s drive to strive towards better efficiency, and sustainability.

In financial terms, a collapse of European society would lead to massive global financial disruptions.As we learned from the 2008 crisis, finance can have a very negative role on global wellbeing.A small country like Greece is keeping the entire financial world on edge, despite it not yet being a failed state, just one undergoing default.Now imagine defaults starting in a few decades in Eastern Europe, making their way West, due to the unsustainable demographic situation.As that happens, Mediterranean countries also start defaulting for the same reason.The result would be that most of our pensions and invested savings around the world would vanish.Investment capital would evaporate, paralyzing many grand expensive projects we depend on, such as multi billion dollars, deep water drilling for oil.

Since the birth of the nation state era a few centuries ago, we became accustomed to thinking of our world in a new stage.It is a more or less static stage.The only movement seems to be the ongoing process of moving towards ever larger administrative entities, which started at the beginning of the dawn of agriculture.Many envisioned a coming time of utopian human unity, with no more divisions.Unsustainable culture, leading to unsustainable development, unsustainable consumption, and unsustainable reproductive practices will probably break this almost uninterrupted trend.We cannot know whether it will be a permanent break, or something more similar to the pause that happened in the aftermath of the collapse of the Roman Empire.But more and more indicators seem to point to the fact that such a historical break is coming.The demographic situation in Europe is a part of the puzzle.We should not shy away from acknowledging the situation and discussing it, because the last thing we want to do is ignore it due to the censorship of political correctness.

[iii] It is hard to get precise data on the Rroma minority, because they tend to shy away from declaring their identity.It is important to acknowledge their demographic presence, because this is a minority well adapted to life on the fringe of society, therefore cannot be considered as viable replacement to the majority population in the absence of cultural changes. Accounting for them as being part of the rest of the population can give a false read on the real situation.

[iv] I considered women of reproductive age to be between the age of 15 and 45.The total number of women born between 1967, and 1997 is about 6 million, but roughly 1.5 million emigrated.

Monday, August 6, 2012

In my book “Sustainable Trade”, I argued that for a culture to be successful in today’s world, it either has to have the right cultural institutions, or the flexibility to adapt to constantly changing realities, by allowing for new norms to develop.I believe that culture is a huge part of our ability to cope with new challenges.In this case, culture can be summed up as regional, national or global depending on the issues we face.The necessary aspects to successful cultural adaptation, as I see them are as follows: Identifying problems, without cultural prejudice, ability to reach consensus on a viable and appropriate solution, and the organizational capabilities to implement solutions. Culture can be an impediment, or a benefit, depending on how much going through these steps come to be at odds with our cultural values.

So given this belief I hold to, I find myself agreeing with someone who ordinarily I would find very little common ground with.It is important to be able to do so and I believe it to be a cultural institution we are currently lacking, because as I stated in my book, there is no set of beliefs wrapped up in an ideology, which can ever have all the right answers.So here I am agreeing partly with Mitt Romney’s statement made in Israel, in regards to culture and economic development.He basically said that Jews are better adapted culturally than Palestinians, and it shows in their much higher level of prosperity.I said I agree partly, because it is not fair to compare economically, occupier and the occupied.In this case, the occupied Palestinians do face many additional barriers to development, aside from their own collective cultural abilities, and many of them can be tied to the occupation, and let us face it, exploitation.Israel is currently colonizing parts of the West Bank, taking away opportunities from Palestinians, and they are also taking away some of their resources without compensation, such as water.Very importantly, Israel controls their trade with the outside world.So, Mitt Romney was disingenuous in his comparison, nevertheless I do agree with him on the basic premise that culture and economic development and success are tightly linked.He just used an extremely bad example.

The reactions to Romney’s statements varied widely.Of note should be the reaction of the Palestinians, who called the statement racist, which I think is hardly helpful, because it stifles the conversation.I believe we should be able to discuss most topics in a civilized honest manner.Of course, Mitt Romney was not honest on this topic, like I already explained, so he is not very helpful either, but at least we can pcik up the conversation since he cast it into the spotlight, which is always a good thing, because we need to analyze such things and discuss them.Then came Fareed Zakaria on his GPS show on CNN, where he argued that it is not culture but the adoption of capitalism that propelled Israel forward in the past two decades.He also points out that cultures that were previously thought to be unable to progress such as Muslims and Africans now are among the fastest growing economies.I do agree with Fareed that no culture should be written off.Like I stated, as long as a culture can find enough flexibility to allow for some of the key ingredients of economic competitiveness and prosperity to take hold, they may prosper.Furthermore, it is important to remember that circumstances change constantly, so certain cultures which managed to do well in the past and present may not have the right adaptations for the future.

In the particular case of Israel and its relatively good economic performance in the past two decade, we cannot ignore what may have been the main factor, and that is the large Jewish immigrant inflow from Eastern Europe in the aftermath of the collapse of communism.Both Fareed Zakaria and Mitt Romney ignored this important factor.Tens of thousands arrived to Israel every year.Most were young, and many were relatively well educated.They created demand for goods and services, and contributed to economic development through their work and entrepreneurship.So, where does culture fit into this?In the case of Israel it is quite obvious really.Jews developed a centuries old mentality of having to stick together, which if any other culture in the west would practice, we would call it racist.They had to promote this in order to survive as a minority in other lands for many centuries.So that provided the immigrant inflow, which was an opportunity created, thanks to cultural institutions.Then they had to provide the mechanism that allowed for this opportunity to be optimized.They probably would have had to shut the gates and keep all these immigrants out if it wouldn’t have been for their thousands of years of belief that the land, including the territories they occupy in the West Bank are theirs, given by god.As such they failed to make peace.Without the extra land in the West Bank, where hundreds of thousands of Jews moved, and without the extra water supplies available courtesy of the West Bank aquifers, which they use for their own needs, at the detriment of the Palestinians, they would have never been able to take advantage of the opportunity that presented itself in the shape of the collapse of communism[i].The fact that they also adopted a more efficient path of growth through more market oriented ideas is also a testament to their ability to adapt culturally by accepting the need for change at the right time, when they were able to take advantage of this immigrant influx.

My case for culture as an important part of development:

In my book, I used the case of post-communist East European countries as an example of cultural ability to adapt to new situations.I pointed out that after more than two decades of post communist development, there is an unmistakable difference in the level of advancement between the mainly Catholic countries, such as Croatia, Slovenia, Poland, Slovakia, Czech Republic and Hungary, and the mainly Orthodox countries like Romania, Bulgaria, Serbia, Montenegro and Macedonia.There is no overlap between the two groups I chose, when it comes to GDP per capita.I excluded all former SovietRepublics from this comparison, but their inclusion would have had no impact on the results.What I mean by saying that there is no overlap in per capita GDP is that, the richest Orthodox nation is poorer than the poorest Catholic nation according to IMF statistics.Furthermore, the difference between the two is quite substantial, since it is the equivalent of about 1/3 of the richest Balkan Orthodox nation, Bulgaria, compared to the poorest Catholic nation Croatia.Bulgaria’s GDP per capita (PPP) as of 2011 is $13,600, while Croatia’s is $18,200.Using nominal values instead of Purchasing Power Parity (PPP), produces slight differences, but still does not offer an overlap situation between the two different groups.

So can the difference in adaptation between the mainly Catholic and mainly Orthodox countries be attributed to anything else?There is the financial situation at the starting point of 1990, where Orthodox Romania had the greatest advantage, since it had no government debt, as opposed to Catholic Hungary which was the most indebted, so no advantage to the Catholic group there.Human and infrastructure capital is an important factor, but here too there are overlaps between the two groups.Familiarity with the market economy goes to the former Yugoslav republics of Croatia, Slovenia and Serbia, so there is an overlap here as well, because Serbia is Orthodox, and it had an advantage over other Catholic countries, except for the ones I mentioned as also being Former Yugoslav.

The only thing left then is culture, and here we have clear differences if we take two factors that seem to have a correlation with development.The factors I identified were the Orthodox versus Catholic religion, where one is national and the other international, which led to a different development in national and nationalist identity.I believe nationalism in both Catholic and Orthodox countries, is equally intense, but the flavor differs, thus it manifests itself differently.The other factor that I believe made a big difference in culture is the Turkish Ottoman occupation in the region.Here we see a correlation since the two Catholic countries that also experienced it, are also the poorest in the Catholic group, which are Hungary and Croatia.

This clearly shows that the assumption voiced by Fareed Zakaria that culture does not play a role in development is false.There would be too much coincidence which would have to be explained away, not to accept that in the case of Eastern Europe cultural factors played a role in development.Now I want to be clear on the fact that this is just a snapshot in time.We don’t know what the future holds.It is possible that when it comes to the countries in Eastern Europe I looked at, there will be overlap at a future point in time, due to either changing circumstances that will render a past superior adaptation useless when it comes to the new factors, or the new factors will favor the cultural institutions of the ones that are currently at disadvantage.There is also cultural evolution to consider.Maybe an enlightenment-like wave of cultural change will grip the Orthodox countries in the region, while the Catholic countries will miss out.

Note:The five countries to the left are all Orthodox Christian dominated states, while the six to the right are all mainly Catholic dominated states.If you notice, there is no overlap in GDP per capita (PPP).This would also hold true if we were to use nominal or real GDP figures.Data is from the IMF as of 2011.If we were to use CIA factbook, or World Bank data, results would be the same.

Conclusion:

I think it would be a dangerous mistake for us westerners to either accept Fareed’s take on culture and economics and assume it plays no role, or Mitt Romney’s assumption that some cultures are more superior to others, thus there is some sort of set destiny we can rely on.We have to be careful to remain culturally relevant when it comes to adapting to circumstances.If one would go ask a cultural anthropology professor to give a short description of culture as a concept, many will choose to answer by saying that it is an adaptation to a culture’s environment.Some may be successful at dealing with new circumstances; some may be successful to re-adapting culture to the new circumstances, while others will stick to what they believe to the bitter end.I think, given the West’s relative decline of the past two decades, it would be wise for us to put all our cultural norms, beliefs, and institutions on the table and subject them to an honest and thorough examination.History and cultural anthropology teaches us that the alternative of closing our eyes and sticking with it to the bitter end can be quite bitter when the end comes near.

About Me

Author of book "Sustainable Trade". Book's central subject is a proposal for the elimination of all current bilateral, and multilateral trade agreements, in favor of a new tariff system meant to encourage sustainability. Double honors degree in History and Anthropology, and a B.A in Economics.